Alleviating go-to market challenges faced by small virtual pharma companies

In the not-too-distant past, large pharmaceutical companies were responsible for developing most of our new drugs. But over time, traditional pharma organizations have become more specialized, and smaller virtual companies are now creating an increasing number of medicines, often targeting rare diseases. These small companies may be able to work faster in their development efforts, given their ability to make scientific and other developmental decisions more quickly than larger pharma organizations.

Innovative virtual pharma companies, whose core competencies are scientific discovery and clinical development and trials, are challenged by the complexity, capital and human costs of bringing a product to market. Unlike large manufacturers skilled and staffed in engineering, supply chain, validation and regulation processes, these smaller companies often turn to contract manufacturers (CMOs) and contract packagers (CPOs) to help launch their product. What specific challenges can be more efficiently and cost-effectively faced by these up-and-coming small pharmas by contracting certain functions to outside contractors who specialize in manufacturing, packaging and particular areas of serialization?

Most virtual pharma companies are created by self-driven individuals who are inspired to take a concept for a new drug discovery and develop it into a treatment that can improve upon a current therapy or meet a previously unmet need. This quest is often relatively undefined in terms of the length of time and amount of capital and staff required to properly and fully develop this product concept. This virtual company may start with only a few scientists who are later supplemented by additional staff, but often these individuals wear many hats to minimize startup costs. As the product evolves, additional capital can be raised, but too often, the initial group continues to be understaffed, and gaps remain in areas in which they have very little, if any, experience.

Over the last 20 years, the number of CMOs and CPOs has increased to meet the pharmaceutical industry’s demand as the development rate has increased considerably. But now, the costs of outsourcing the manufacturing, packaging and serialization has increased substantially as the overhead structures, degree of automation and functional areas such as validation have become larger and more expensive.

Once the new product is developed, strong attention should be paid to how best to manufacture it. Small companies may find that it is simply too difficult and expensive to set up, test, validate and maintain a manufacturing line. Therefore, a small pharma company may determine that contracting out this discipline to a CMO is still advisable and much less risky, resulting in a shorter time to market.

The packaging, serialization and validation of the product is an area that small pharma companies are now giving serious thought to doing themselves rather than contracting out to a large, but often costly contract packager. Once the FDA has approved a new drug, the small and often virtual pharma companies are eager to launch their product as quickly as possible to generate positive cash flow for the first time. However, these organizations should seriously reconsider contracting out the packaging, serialization and validation to a contract packaging company, and analyze what the cost and complexity would be to perform these functions internally at their facility, particularly if the volume of packages per year is a small amount.

An increasing number of new pharma companies are developing specialized and sophisticated biopharmaceutical drugs that will be sold at much smaller quantities than those launched 15 to 20 years ago. The drugs that are produced in much smaller amounts can be packaged and serialized with a very small number of operators (possibly one to two), potentially at much lower costs than the pharma organization would pay to have that same quantity of products packaged at a contract packaging company.

For example, during the first one to two years of production of a newly approved biopharmaceutical product, the quantities sold per year may be 500-2,500 per shift, which can be packaged by one or two operators at the brand owner’s facility without much difficulty. The packaging equipment for the primary package, case and, if applicable, the pallet can be operated manually by only one operator with minimum training provided by the serialization equipment manufacturer.

Serialization is now available at a far lower price than was available 10 years ago and is available in configurations that are designed for maximum efficiency. The serialization equipment for these quantities of 500-2,500 per shift is broken down into two categories:

• Packaging line serialization equipment: The equipment used to place the serial numbers of the primary package—usually carton or bottle—and then the case and, if applicable, the pallet. Printing and barcode scanning equipment is available at affordable prices, and can be installed and commissioned in one day, including adequate training of the one to two operators. The operators would have no problem serializing this same number of packages—500-2,500 per shift. The pharma industry refers to these levels packaging line serialization equipment as Level 1—often referred to as L1—for each of the primary, secondary and tertiary stations, Level 2 (L2) for the packaging line server and Level 3 (L3) for the site server. Often the L2 and L3 servers can be combined into the same piece of hardware.

This L1-L3 serialization equipment can be expanded very cost-effectively as sales of the product grow, and production capacity increases, with perhaps the addition of one to two more personnel.

• Level 5 cloud database: In almost all cases, this L5 database is provided as a service by companies with serialization technology, and can now be done quite affordably. The packaging operator with minimum training (one to two days) can be instructed to coordinate with the L5 database, which is typically provided virtually by companies who provide that L5 database on a cloud-based service. The price for this L5 support is now available at very competitive prices and can now be contracted from the same company that provides the L1-L3 equipment.

The packaging and serialization equipment for a virtual pharma company can be done very economically and may not require that much space. Often the products are partially packaged in some way by the contract manufacturer, and thus can be serialized in a room that has a low clean room rating.

Virtual pharma companies are encouraged to consider all alternatives for packaging and serialization. They should be willing to evaluate the feasibility of doing the packaging and serialization in-house to provide for greater flexibility and often lower cost and greater flexibility.

Another initiative that small virtual pharma companies may want to consider is the use of serialization to provide a more personalized medicine delivery. For example, a mobile app can be developed to provide a program of registering and monitoring the adherence of the brand owner’s medicine for each patient. Although the typical serialization methodology is to put a serial number on each primary package (e.g., carton), the medication can be packaged to provide a blister pack with a serial number for each unit dose. The physician’s staff can be trained to work with each patient to ensure that the medication is being taken as prescribed. This improved adherence rate can make a positive difference in the adherence and resulting positive therapeutic effect. Additionally, marketing information or possibly credit certificates can be offered, but only made available if the patient participates in an online educational program related to the disease be treated with this medication.

About the author

Steve Wood is President and CEO at Covectra. He can be reached at [email protected].